Asset Accounts

An asset is any item owned by a company. Assets have a current and future value for the company, which owns them. These items are displayed on the balance sheet only. Assets are listed as permanent accounts that are never closed. Asset Accounts have a normal balance of a debit (Latin for Left).
Current Assets: This is a section heading. These items are used up within a 12-month period of time. Asset title Debit Credit Cash Increase Decrease Short-term investments Increase Decrease Notes Receivable Increase Decrease Accounts Receivable Increase Decrease Inventory Increase Decrease Supplies Increase Decrease Prepaid Expenses such as Prepaid Rent, Prepaid Increase Decrease Insurance or Prepaid Advertising Property, Plant and Equipment: This is a section heading. These items are used up over a period which is longer than 12 months or a fiscal period. Land Increase Decrease Building Increase Decrease Equipment--any machine that is used to provide a Increase Decrease service or manufacture a product for a customer. Intangible Assets: This is a section heading. These items are used up over a period, which is longer than 12 months or a fiscal period. These items have not physical substance but are a legal right owned by the company. Patent Increase Decrease Copyright Increase Decrease Goodwill Increase Decrease Trademark or Trade name Increase Decrease

MJC Revised 1/2012

Page 1

Asset Accounts

Contra Assets are accounts that are subtracted from an asset account in order to produce a net amount that reflects a reduction due to usage or loss of value. These items have a normal balance of a credit since they reduce the assets value.

Contra Assets: Are accounts which are matched with the asset that they are subtracted from Asset title Allowance for Doubtful Accounts Accumulated Depreciation Debit Decrease Decrease Credit Increase Increase

MJC Revised 1/2012

Page 2